Correlation Between SentinelOne and SpringWorks Therapeutics

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Can any of the company-specific risk be diversified away by investing in both SentinelOne and SpringWorks Therapeutics at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SentinelOne and SpringWorks Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and SpringWorks Therapeutics, you can compare the effects of market volatilities on SentinelOne and SpringWorks Therapeutics and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in SentinelOne with a short position of SpringWorks Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and SpringWorks Therapeutics.

Diversification Opportunities for SentinelOne and SpringWorks Therapeutics

-0.44
  Correlation Coefficient

Very good diversification

The 3 months correlation between SentinelOne and SpringWorks is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and SpringWorks Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SpringWorks Therapeutics and SentinelOne is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on SentinelOne are associated (or correlated) with SpringWorks Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SpringWorks Therapeutics has no effect on the direction of SentinelOne i.e., SentinelOne and SpringWorks Therapeutics go up and down completely randomly.

Pair Corralation between SentinelOne and SpringWorks Therapeutics

If you would invest  4,699  in SpringWorks Therapeutics on October 1, 2025 and sell it today you would earn a total of  0.00  from holding SpringWorks Therapeutics or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy5.0%
ValuesDaily Returns

SentinelOne  vs.  SpringWorks Therapeutics

 Performance 
       Timeline  
SentinelOne 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days SentinelOne has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.
SpringWorks Therapeutics 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days SpringWorks Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, SpringWorks Therapeutics is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

SentinelOne and SpringWorks Therapeutics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SentinelOne and SpringWorks Therapeutics

The main advantage of trading using opposite SentinelOne and SpringWorks Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne position performs unexpectedly, SpringWorks Therapeutics can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in SpringWorks Therapeutics will offset losses from the drop in SpringWorks Therapeutics' long position.
The idea behind SentinelOne and SpringWorks Therapeutics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.

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